Introduction The internal rate of return is a clear way to read an investment. It answers one practical question for any decision maker. What steady yearly return would make the present value of all future cash flows equal the money invested today. If that return beats a fair benchmark at similar risk, the idea deserves […]

Introduction Over the past decade, India has witnessed rapid growth in its private credit market, and the burgeoning corporate bond market has been at the cornerstone of this development. As more investors become aware of the benefits of bonds, especially in terms of portfolio diversification, the corporate bond market continues to gain momentum. Corporate bonds […]

LIBOR, or the London Interbank Offered Rate, once acted as the global foundation for pricing countless financial products. It was used in loans, mortgages, and financial contracts worth trillions of dollars. Even though it no longer exists in active use today, its story still helps explain the logic behind today’s benchmark rates and why financial […]

A home loan does not always stay only with the lender. Sometimes, many such loans are grouped together and converted into an investment product. This is called a mortgage backed security. Investors who buy it receive money from the repayments made by home loan borrowers. Key Takeaways A mortgage backed security is created from a […]

Mr. Mahesh had always been wary of bond investing. He had heard stories of investors losing money in bond investments because the company defaulted, and the thought of taking such risks made him very anxious. For years, he avoided any investment opportunity that involved bonds, even though his financial advisor tried to explain the benefits […]

Introduction Over the last decade, the financial landscape in India has undergone a significant digital transformation, resulting in a revolution of traditional investment avenues through technological advancements. One such innovation is the emergence of SEBI registered Online Bond Platform Providers (OBPPs), which have democratized bond trading by offering investors convenient and accessible online platforms.  In […]

Interest rates can change quickly, but loans and investments often continue for months or years. This creates uncertainty for banks, companies and investors. Overnight Index Swaps help manage that uncertainty. Through an OIS, two parties exchange fixed and floating interest payments, with the floating side linked to a compounded overnight interest rate. Key Takeaways What […]

Introduction When an investor opens a bond detail page, many numbers appear together. Coupon, yield, price, maturity and rating. Among them, Par Value of Bond is one number that often gets ignored. It should not be. Par value is the base value of the bond. It usually tells the investor how much the issuer will […]

Introduction ‘Don’t put all your eggs in one basket’ – this is the saying that almost every investment literature declares for investors. Nobody wants to lose their investment capital but make returns on it. Thus, investors usually invest in multiple asset classes. Further, in every asset class, the investor can also invest in different schemes […]